PIA raises $130 million

By Dino D'Amore
November 28, 2013 12:02

Pakistan International Airlines has successfully closed a US$130 million Islamic facility with multi-currency tranches in AED and USD. The transaction is based on an innovative Shari’a structure comprising Vouchers representing PIA seats as the underlying asset. The first such transaction was done in 2011 by PIA, which raised $100 million.

The pricing was not disclosed but is stated to be “attractive for PIA and lower than the 2011 transaction”.

A critical element of the transaction success is a robust security structure comprising of an assignment of PIA’s IATA receivables from the Saudi route, which are received directly into a secured overseas account. Mandated lead arranges on the deal are Citi, National Bank of Pakistan & WARBA Bank. Participants are: Alubaf Arab International Bank, Bank Alfalah, Citi, National Bank of Pakistan, United Bank Limited and WARBA Bank. Citi also acted as account bank and security trustee. Meanwhile, Qantas and Jetstar have announced that they will not be altering flight paths to avoid China’s claimed airspace the disputed Senkaku Islands, even though the daily Sydney-Shanghai service operated by Qantas passes close to the islands.

The US has ordered its commercial airlines to avoid the disputed zone. Aircraft pilots have been warned that if they do fly within the zone, they will need to provide their flight plan, declare their nationality and maintain two-way radio communication, or face defensive emergency measures. However the US will not be complying with the rules for its defence aircraft.

Japan, Taiwan and South Korea have called the zone invalid, unenforceable and dangerous.